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Social Networks on Cashback Websites

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Psychology and Marketing

Published online on

Abstract

The relevance of Cashback sites as a profitable business model has grown considerably over the last decade, where customer's social networks have been one of the most important keys of success. Hence, the success of cashback websites business model not only lays on strategies such as offering a wide portfolio of affiliate merchants and competitive cashbacks per transaction to attract new customers, but also on their ability of engaging them and enrolling new target customers through recommendation in a word‐of‐mouth marketing strategy. By a applying this kind of strategies, both the recommender and the referee benefit from referee's transactions in the network, meaning that benefits for customers and companies grow at the same time that the customer's social network grows and become more active. Consequently, this research focuses on the analysis of the impact of customer's social network on cashback websites from two different perspectives. From the customer's perspective, determining the impact of the social network composition and their activity in customer's benefits of cashback. Second, the research focuses on the ecommerce's perspective, testing which kind of customers, characterized by whether they have social network or not, are more profitable to the brand in terms of purchase behavior and loyalty. The findings are a step forward to understand customer behaviour and the relevance of social networks on cashback websites business model and help the companies to establish the basis to develop new digital marketing strategies less concentrated in media advertisements and oriented to increase customer acquisition, retention, and profitability.